House Appropriations Approves Top Line Spending Levels

Last week, the House Appropriations Committee voted to adopt top-line allocations for the 12 Appropriations subcommittees, effectively locking in sequester level spending amounts. These funding levels will provide a starting point as subcommittees work on their spending bills. The Committee allocated the Labor, HHS, and Education Subcommittee $153.1 billion in discretionary funding. While the current funding level is $156 billion, this amount represents a much smaller reduction than the more than $30 billion cut that was previously proposed. The Appropriations Committee also went on to approve the first two fiscal year 2016 spending bills, Energy-Water and Military Construction-Veterans Affairs (VA). The House spending bill on veterans health programs would provide $64.8 billion for the Veterans Health Administration, which is more than the $59.5 billion provided in last year’s spending package but less than the $65.2 billion requested in the President’s budget. Secretary of Veterans Affairs Robert McDonald has indicated that the funding in the House spending bill will not be adequate to meet the demands for medical care at the VA. In 2016, the VA is expected to handle at least 101 million outpatient visits, an increase of 2.8 million from 2015. While Democrats continue to push for another bipartisan budget deal, appropriators continue working under the spending caps set by sequestration. The President has promised not to sign any spending bills that continue the use of statutory sequester spending limits. Movement on a bipartisan budget agreement is unlikely to begin before the conference committee tasked with reconciling the House and Senate budget resolution adjourns. The conference committee is expected to conclude negotiations in the near future. Senate Budget Chairman Michael Enzi (R-Wyo.) has confirmed that the conference language will call for the repeal of the sustainable growth rate (SGR) to be fully offset, but at some unspecified point in the future. Repeal of the Medicare reimbursement formula included $141 billion in unpaid costs. The conference plan will also outline how reconciliation legislation will be developed, with much consideration given to alternatives to repealing and replacing the ACA. Last week, the Republican Study Committee Chairman Rep. Bill Flores (R-Texas) and Senate Steering Committee Chairman Sen. Mike Lee (R-Utah) expressed support for the conference committee’s use of narrow reconciliation language focused on the full repeal of the ACA.

Trade Bill Includes Cuts to Medicare Program

The Trade Adjustment Assistance (TAA) bill advanced by the House and Senate last week is offset in part with cuts to the Medicare program. The TAA provides a tax credit to help workers displaced by trade purchase health insurance. The bill includes a six-month extension of the Medicare sequester, which would entail a 0.25 percent cut in Medicare payments in fiscal year 2024. This provision amounts to a $700 million cut, according to the Congressional Budget Office (CBO). The House Ways and Means Committee cleared the measure by voice vote but without recommendation. The Senate Finance Committee also advanced a similar package. Many Democrats opposed the use of offsets from the Medicare program, and House Ways and Means Chairman Paul Ryan (R-Wis.) has indicated that an alternative pay-for could be found in the development of a final package.

Republicans Continue Work on King v. Burwell Contingency Plans

Sen. Ron Johnson (R-Wis.) introduced the most recent Republican legislation in preparation for the King v. Burwell Supreme Court decision. The Preserving Freedom and Choice in Health Care Act (S. 1016) would allow people to temporarily keep their health care exchange plans if the Court rules against the Administration and invalidates the ACA’s use of federal subsidies. Under S. 1016, people could keep their health plan and their subsidies until August 2017. At this point, there could be a Republican president in office, allowing the ACA to be repealed in its entirety and replaced with a Republican alternative. The bill would also repeal the law’s individual and employer mandates. This bill is the latest in more than half a dozen Republican contingency plans which would help maintain coverage for the 7.5 million Federally Facilitated Marketplace enrollees in at least 34 states in the aftermath of a Supreme Court decision in favor of the plaintiffs. Sen. Johnson’s bill has 31 Republican cosponsors, including Majority Leader Mitch McConnell (R-Ky.). A ruling is expected in the King v. Burwell case by the end of June.

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